Portugal Colonial - Stock markets rise on eve of US inflation data

Oil prices extended losses on hopes of an international deal over Iran's contested nuclear programme.

Europe's travel sector was lifted by this week's outlook from German tourism giant TUI, which stated that post-pandemic holiday demand is high across all regions.

Nevertheless, investors remain cautious before Thursday's critical US inflation print for January.

Forecasts are for another pop up from the four-decade-high seven percent seen in December, while a big miss in either direction could have big consequences for markets.

- 'Markets could get jittery' -

"Inflation figures from the US ... will be a major influence on the direction of markets as the figures will be digested by the Federal Reserve in its next decision on whether to raise interest rates or not," said AJ Bell analyst Russ Mould.

"With expectations that inflationary pressures are going to get worse in the near-term, markets could get jittery as we approach the data release."

A higher reading will pile pressure on the Fed to embark on a more aggressive tightening campaign -- but a weaker figure would temper those worries.

"The inflation data has continued to rise faster than many anticipated and we're now in a situation where central banks are racing to catch up and get to grips with price pressures," said Oanda's Craig Erlam.

"Many still expect we'll see an orderly return to inflation targets over the forecast horizon with moderate rate increases but the risk of inaction becomes far greater than the alternative."

With speculation swirling over the Fed's plans to battle soaring prices, global equities have fluctuated wildly since the start of the year as traders try to position themselves for a series of interest rate hikes that are likely to begin in March.

The prospect of the removal of cheap cash -- which has pushed markets to record or multi-year highs -- has particularly hit tech firms as they are more susceptible to higher rates.

However, the sector helped New York's three main indexes to healthy gains on Tuesday, and Asia followed suit.

Hong Kong led the way, jumping more than two percent thanks to a 6.8 percent surge in market heavyweight Alibaba after Japan's SoftBank allayed fears it was planning to offload some of its huge holdings in the e-commerce giant.

Alibaba had taken a hit earlier on speculation about the share sale, which compounded the Chinese firm's woes after suffering hefty losses owing to Beijing's crackdown on the tech sector.

- Key figures around 1200 GMT -

London - FTSE 100: UP 0.6 percent at 7,609.16 points

Frankfurt - DAX: UP 1.3 percent at 15,444.33

Paris - CAC 40: UP 1.3 percent at 7,119.25

EURO STOXX 50: UP 1.4 percent at 4,188.23

Tokyo - Nikkei 225: UP 1.1 percent at 27,579.87 (close)

Hong Kong - Hang Seng Index: UP 2.1 percent at 24,829.99 (close)

Shanghai - Composite: UP 0.8 percent at 3,479.95 (close)

New York - Dow: UP 1.1 percent at 35,462.78 (close)

Euro/dollar: UP at $1.1425 from $1.1415 late Tuesday

Pound/dollar: UP at $1.3573 from $1.3543

Euro/pound: DOWN at 84.18 pence from 84.29 pence

Dollar/yen: DOWN at 115.39 from 115.55 yen

Brent North Sea crude: DOWN 0.4 percent at $90.45 per barrel

West Texas Intermediate: DOWN 0.5 percent at $88.95

A.F.Rosado--PC